The Good News at the Gap

And Gap has used the Web to do what it can’t do in stores, like offering extended sizes in pants along with other items that don’t necessarily justify square footage in every store, like maternity clothing.

A Rarely Erring Eye

Joshua Chernoff, a vice-president at A.T. Kearney, which has consulted for Gap, gives the bulk of the credit to Gap’s management. Despite the fashion misses the company’s divisions have had this year, Gap CEO Mickey Drexler is still a highly respected merchant, with a rarely erring eye for what customers want.

And its board “demands rational thinking,” says Chernoff. Board members include Charles Schwab, who saw enough potential in the Internet to take his brokerage online long before its rivals, and Apple co-founder Steve Jobs. According to Chernoff, Jobs immediately asked why the company wasn’t making money on its Web site.

Gap hasn’t disclosed how much it has spent on its online business, or when it expects to make money if it isn’t already doing so, but it hasn’t mentioned Internet spending as a source of any of the financial woes it has suffered this year. Chernoff expects Gap’s Web operations to be a bright spot amid a generally tough holiday season for it and other retailers.

Really, what the Gap has done is fairly simple: It realized early on that to get the most customers, it has got to be where customers are, whether that’s in the mall or on the Web. The catchphrase for that is ‘bricks-and-clicks’.

For the Gap, it’s just good business.

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